Described as the UK’s largest delivered wholesaler for the convenience market, P&H serves around 90,000 customers ranging from local corner stores to major supermarkets.

It is Britain’s biggest tobacco supplier, also supplying alcohol, confectionary and groceries, including fruit and vegetables, to its customer base.

Administrators PwC said P&H had “been by hit by challenging trading conditions in recent months”, with efforts to restructure the business proving unsuccessful.

“This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business,” the company reported.

The collapse of P&H follows a raft of recent consolidation in the wholesale and convenience sectors.

Earlier this month, Tesco's £3.7 billion takeover of food wholesaler Booker got the green light from the Competition and Markets Authority (CMA), and is set to bring together the UK’s largest retailer and wholesaler respectively.

Reacting to the news that P&H had gone under, retail commentator Steve Dresser tweeted: “Tesco / Booker has literally kicked off a domino effect in the wholesale sector, seemingly forcing P&H in to administration tonight.”

According to PwC, P&H employed 3,400 people and has been forced to make around 2,500 immediate redundancies at its head office and in the branch network of 14 regional distribution centres. Currently 450 employees have been retained within the wholesale business.

The remaining employees will assist the joint administrators “in managing the activities of the business to an orderly closure,” PwC said.

Matthew Callaghan, joint administrator and PwC partner, said: "The Palmer & Harvey name has been a trusted partner for retailers and suppliers for nearly 100 years. This is a devastating blow for everyone who has been involved in the business.

“The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while.

“The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale. Therefore, the directors have had no choice but appoint administrators.”

The administrators are continuing to explore options for a sale of P&H Direct Van Sales Limited, P&H Sweetdirect Limited and P&H Snacksdirect Limited, all subsidiaries of Palmer & Harvey McLane.

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